But can Intel really create a product that could challenge what current cable and satellite providers have, along with set-top boxes such as Microsoft's Xbox 360? A new report from Ad Age suggests that the answer to that question could be, "Yes."

The report, based on unnamed sources who have been among the few to test the service, claims that Intel's system will not have the typical "clunky" programming grid UI we see in other cable TV solutions. It will also have a cloud-based DVR, a way to view content on tablets, smartphones and other screens and more.

As far as the hardware, the report claims that the remote control will be much simpler to use than others that feature many buttons. The set-top box is said to be impressive in design, complete with a front-facing camera. It's even suppose to learn what TV shows a person watches so it can recommend new ones. The final result, according to the people who have seen the service, is one that is a "significant advance over any existing cable or satellite platform."

That could spell trouble for Microsoft, which has been turning its Xbox 360 game console into more of an entertainment multimedia box in the past few years. Microsoft just announced this week it was selling its Mediaroom IPTV service to Ericsson. Yusuf Mehdi, corporate vice president of marketing, strategy and business for Microsoft's Interactive Entertainment Business, said this will allow the company "to commit 100 percent of its focus on consumer TV strategy with Xbox."